In its first budget, the newly elected Ontario government has put forth its plan to balance the books in five years’ time. While the government’s fiscal situation needed a course correction, the road to balance will be extremely challenging. Read the Conference Board’s take on Budget 2019.
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With its first budget, the new Progressive Conservative government in Ontario outlined its plan to balance the books by 2023–24. Without tax increases, this will require one of the most stringent spending plans in the province’s history.
No departments are spared as the province looks to slay its current $11.7-billion deficit in the next five years.
The Ontario economy is slowing more quickly than anticipated just a few months ago. The Ministry of Finance’s views on the economy are in line with those of The Conference Board of Canada. Real economic growth is forecast to average around 1.5 per cent over the next two years.
There are a number of risks to the government’s fiscal plan. On the spending side, unprecedented restraint will be difficult to achieve. On the revenue side, there are numerous risks to the economic outlook, including household debt, low business confidence, and trade disputes, which all have the potential to derail government income growth.
Budget 2019 proposes few new stimulative measures; a small child care tax credit will have only a marginal impact on the economy.
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